Annual pay growth, excluding bonuses, from May to July 2023 was 7.8%, according to data from the Office for National Statistics (ONS).
Its latest labour market figures revealed that this was the same as the previous quarter, the highest regular annual growth rate since comparable records began in 2001, and in line with market expectations.
Annual growth in employees’ average total pay including bonuses was 8.5%, due to NHS and Civil Service one-off payments made in June and July 2023. In real terms that have been adjusted for inflation using Consumer Prices Index (CPI), annual growth for total pay rose by 1.2% year on year, while annual growth for regular pay rose by 0.6%.
In addition, median monthly pay for August 2023 has been estimated at £2,260, a 6.7% increase compared with the same period of the previous year and the highest rate since 2001.
Darren Morgan, director of economic statistics at ONS, said: “Earnings in cash terms continue to increase, at a record rate outside the pandemic-affected period. Coupled with lower inflation, this means people’s real pay is no longer falling. Unemployment continues to increase in the latest three months and employment is down, driven by falls among men and the self-employed. The proportion of people neither working or looking for a job is slightly up, with more students, as well as the long-term sick reaching yet another record.”
Julia Turney, partner at Barnett Waddingham, added: “Of those businesses which are hiring however, the Bank of England finds around half are still reporting problems recruiting, leading employers to compete on salary. While the outlook for wage growth has fallen to around 5%, this is still concerningly high if we compare it to typical pre-pandemic rates of 2-3%. In this environment, it’s vital that staff not only feel they are fairly paid but valued in the work they do. Salary is a centre point for why people seek a job, but benefits, culture and wellbeing are why they stay.”